SABMiller hit by sales drop

Brewer tries Eastern Europe, Latin America as U. S. consumption falls

Shares of

SABMiller PLC, the world’s third-largest brewer, slid 2.2% yesterday as figures showed that quarterly sales of Miller fell in North America.

Miller sales fell 0.3% in the six months through September, compared with a gain of 1% for the first three months, the London-based company said yesterday. Total beer volumes for the first half rose 5%.

SABMiller is pursuing sales growth in places including Eastern Europe and Latin America as beer consumption wanes in the United States and Western Europe. In the United States, where consumers in their 20s and 30s are increasingly choosing spirits and wine over beer, Miller sales worsened in the fiscal second quarter after Anheuser-Busch Cos., the world’s biggest brewer, cut prices to win back customers.

“ The market was a bit disappointed with the Miller volumes,” said Claude van Cuyck, who helps manage about US$39-billion, including SABMiller shares, at Cape Town, South Africabased Sanlam Investment Management.

Anheuser-Busch, the St. Louis-based brewer of Budweiser, offered discounts on some brews amid competition from Miller Lite. The U. S. company in July posted a 9.9% decline in second-quarter profit.

Sales of Miller Lite, SABMiller’s lowcarbohydrate beer, increased in the fiscal first half, offsetting a decline in other brands. Total profitability was hurt by price competition and higher costs.

SABMiller’s beer volumes rose 3% in South Africa, the company’s former home market, where household disposable incomes rose an annualized 5.7% in the second quarter, up from 4% in the previous three months.

Soft-drink volumes advanced 10% in South Africa, aided by warm winter weather.

SABMiller, founded in Johannesburg in 1895, still dominates the South African beer market with local brand Castle Lager and generates almost half its earnings from the country.

SABMiller moved its stock-exchange listing to London in 1999 and changed its name from South African Breweries after acquiring Miller Brewing Co. in 2002.

The beermaker began expanding outside South Africa in the early 1990s as the lifting of sanctions on the country following the end of apartheid enabled SABMiller to invest overseas again.